States are adding a new requirement for high school graduation: financial literacy
States are adding a new requirement for high school graduation: financial literacy
Lawmakers in Michigan have approved a bill requiring high school students to take a personal finance class. It now goes to Gov. Gretchen Whitmer for her signature.
This would make Michigan the 14th state to require public high schools to teach personal finance. Florida and Georgia also passed similar laws this year, and a number of other states are considering them.
The number of states requiring personal finance in high school has nearly tripled since 2019 after barely budging for years.
John Pelletier at the Center for Financial Literacy at Champlain College has a theory as to why:
“I actually think COVID really opened people’s eyes to how financially precarious people are in the way they live their lives.”
In addition to that, he said, it’s gotten really easy for anyone, including teenagers to buy stocks – and crypto. “You’re dealing with a youth that can, in probably 10 minutes, open up a Robin Hood account, right, or a Coinbase account, so these concepts, I think, are almost more important now,” he said.
Research shows that requiring a personal finance class in high school changes people’s behavior for the better, said Carly Urban at Montana State University.
“[It] improves credit scores by age 22. It reduces delinquency rates. Student loan repayment is actually much higher after graduation. And, payday lending decreases,” Urban said.
According to the nonprofit Next Gen Personal Finance, 20 states are currently considering legislation to require a class in high school.
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